Question

3. In Kingsbury County, there is a demand and supply schedule for fast food. Here is the table below: Price Quantity Supplied Quantity Demanded 4.00 4.50 5.00 5.50 6.00 3,000 3,500 4,000 4,500 5,000 5,000 4,500 4,000 3,500 3,000 4. In Kingsbury County, there is a demand and supply schedule for fast food. Here is the table below: Price Quantity Supplied Quantity Demanded 4.00 4.50 5.00 5.50 6.00 3,000 3,500 4,000 4,500 5,000 5,000 4,500 4,000 3,500 3,000

Answer 1

3. Demand and supply schedule

Price ($)	Quantity Supplied	Quantity Demanded
4.00	3,000	5,000
4.50	3,500	4,500
5.00	4,000	4,000
5.50	4,500	3,500
6.00	5,000	3,000

Refer to the above table, the equilibrium price is $5.00 and the output is 4,000.

If the price is $6.00, then there is –

Answer – SURPLUS OF 2,000

When the price is $6, the quantity supplied is 5,000 and the quantity demanded is 3,000. Therefore, there will be a surplus of 2,000.

4. As per the table, the equilibrium output and price is determined at that point where the quantity demanded equals to quantity supplied.

Other things remain constant (ceteris paribus), if there is a report that eating fast food is much more hazardous. This cause a decrease in the demand. The demand curve will shift to the left-hand side (assuming supply remains constant).

When the demand decreases, the price will FALL and the output also FALL.

Answer – FALL; FALL